A recent Congressional Budget Office report examining trends in family wealth confirms what most Americans knew to be true: The poor are buried in debt and the middle-class disappearing as the most wealthy are getting richer by the minute.
The report, released last week, reveals that “the distribution of wealth among the nation’s families is more unequal than ever.” The report confirmed that the gap between the rich and the rest has continued to grow. It found that the top 1 percent has seen its average real income grow 192 percent since 1981, compared with a 46 percent increase for middle-income families. ‘Coincidentally’, Ronald Reagan became president that year.
The report was conducted at the request of Sen. Bernie Sanders (D-Vt.).
“The reality, as this report makes clear, is that since the 1980s there has been an enormous transfer of wealth from the middle class and the poor to the wealthiest people in this country,” the former Democratic presidential candidate said in a statement.
The report shows that Families in the top 10 percent of wealth distribution now hold more than three-quarters of the nation’s total family wealth. Those falling within the 51st to 90th percentiles owned less than a quarter of it. Meanwhile, the bottom 50 percent own just 1 percent of the total share. CBO defines wealth as a family’s assets—including business and home equities, other real estate holdings, financial securities, bank deposits, and pension accounts—minus its debts.
Putting it into dollars, the CBO notes that the average wealth of the top 10 percent of families was $4 million compared with $36,000 for those in the 26th to 50th percentiles. The wealth of families in the bottom 25 percent was in the red, because of an average of about $13,000 in debt, up from around $1,000 in debt prior to the Great Recession.
Most of us already knew this from experience, but hearing it from the CBO is truly demoralizing.
The report also found an increase in debt among the bottom 25 percent of families, due in part to rising student loan debt, which jumped from $24,000 to $36,000 on average between 2007 and 2013.
Sanders also took to Twitter to condemn the wealth gap highlighted in the CBO report.
“There is something profoundly wrong when the rich keep getting richer and virtually everyone else gets poorer,” Sanders said.